Virginia Senate could be headed for budget stalemate

RICHMOND — Democrats in the evenly divided Senate signaled Sunday that they will try to force another budget stalemate unless the General Assembly agrees to expand Medicaid under the Affordable Care Act.

In back-to-back meetings Sunday, the Senate Finance and House Appropriations committees approved a variety of amendments to the current two-year budget, covering raises for teachers and school staff, water-quality improvement projects and transportation.

The House panel adopted its proposed amendments unanimously. But the Senate’s plan met approval with a 10 to 5 vote along party lines. All five Democrats opposed the plan because the amendments did not include language to expand Medicaid.

Senate Democrats predicted that their caucus will stick together on the budget, as they remain furious over the off-year redistricting plan the GOP sprang on the Senate last month. Democrats forced a budget standoff last year over Senate committee assignments and transportation funding, but it collapsed after Sen. Charles J. Colgan (D-Prince William) voted with Republicans.

Unlike last year — when the General Assembly was drawing up a two-year spending plan — a budget stalemate would not pose the threat of a government shutdown because legislators are working on amendments. If legislators do not come to an agreement, the state would keep operating under the budget approved last year.

The House and Senate are working on amendments to the $85 billion budget that the state has been operating with since July 1. Gov. Robert F. McDonnell (R) unveiled his proposed amendments in mid-December, calling for 2 percent teachers’ raises, devoting more general fund revenue to roads and squirreling away nearly $130 million in the state’s rainy day fund.

The House and Senate panels accepted some of McDonnell’s ideas and tinkered with others. Both signed off on his plan to divert $49 million from the general fund, where it would be used for such services as schools and public safety, to roads. Both panels agreed with his teachers’ raise but extended it to non-instructional school staff.

A budget standoff could heighten partisan tensions, already raw from the GOP’s redistricting gambit, and make it hard for the parties to come together on transportation and other significant issues.

“This budget has a fatal flaw,” Sen. Janet D. Howell (D-Fairfax) said. “It does not include Medicaid expansion. I think that’s morally wrong. We must not deprive over 300,000 Virginians of health care. For years we’ve known we have one of the most miserly programs in the country. We couldn’t improve it much because we didn’t have the money. Now that money is being offered us, and we shouldn’t spurn it.”

Under the federal Affordable Care Act, states have the option to open their Medicaid programs to people with incomes up to 138 percent of the national poverty level — which is about $32,000 for a family of four — with the federal government paying the entire cost for the first three years. The federal share gradually declines to 90 percent.

Virginia would initially receive about $2 billion a year from Washington under the program. But some Republicans, including McDonnell, have been skeptical that Washington will have the money to make good on that promise.

Lt. Gov. Bill Bolling (R), who is exploring an independent bid for governor against Attorney General Ken Cuccinelli II (R) and former Democratic National Committee chairman Terry McAuliffe, announced last week that he supports Medicaid expansion if Washington grants Virginia permission to reform how the program operates in the state.

Bolling presides over the Senate and has the power to break most tie votes, but he cannot help Democrats on this issue: He lacks authority to vote on the budget.

The budget amendments the House and Senate panels passed Sunday call for Medicaid to be reformed before Virginia considers expansion, which begins in January 2014. The spending plan the General Assembly is trying to amend runs through July 1, 2014 — covering the first six months of Medicaid expansion.

The panels reacted differently to calls from the Governor’s Task Force on School and Campus Safety, created after December’s Sandy Hook Elementary School massacre in Connecticut, to provide $1.7 million for school resource officers and create a $30 million revolving fund for security infrastructure projects in Virginia schools.

The Senate panel included $1 million for grants for school officers, and the House recommended adding $1.3 million for them. They anticipate taking up the revolving fund issue in conference.

The House and Senate plans boost the pay raise state employees and college faculty are set to receive in August from 2 to 3 percent. Both call for bond packages of more than $215 million to improve the Chesapeake Bay by upgrading wastewater treatment facilities in Richmond and Lynchburg.

Sen. Ryan T. McDougle (R-Hanover), a Finance Committee member, said he was frustrated that Democrats would threaten to hold up the whole budget again.

“If we we see a repeat of last year, maybe we’ll see a trend” of obstructionism, McDougle said.